BHP Billiton tabled in the last week of February an opening gambit for a 14% price increase. This would represent an increase of US$6/t for "benchmark" Goonyella brand coal, from US$42.75/t to US$48.74/t FOB. Some sources have said that the JSM have responded with a counter offer of a US$1/t FOB increase, but this is disputed by other contacts. Regardless, all agree that the JSM is now reconciled to the inevitability of a price rise.
Hard coking coal prices remained relatively firm in the recent tender for 800,000t of coking coal by the National Iranian Steel Company (Nisco). The tender was reportedly under-subscribed by 70,000t, with bids ranging from Fording Coal’s US$50.45/t FOB to Anglo Coal’s US$52.35/t FOB – not that this provides much insight into market fundamentals, given that producers were never going to submit ultra-low prices into a small coking coal tender at this critical stage of negotiations with the Japanese steel mills.
Other bidders were traditional Nisco suppliers MIM (US$52.25/t) and RAG (US$51.75/t) as well as Glencore (US$51.85/t) and BHPB (US$51.55/t) The Nisco tender is for deliveries for the year commencing April 2002, with official results of the tender yet to be announced.
Iranian imports of coking coal, by the way, may shrivel away in a couple of years time as Nisco is initiating development of a 1.5Mtpa longwall coking coal mine at Tabas. The mine is situated in the Parvadeh coalfield, near the border with Afghanistan, and will supply coal to Nisco’s integrated steel plant in Isfahan.
There are some signs from elsewhere that the tightness in the international hard coking coal market is easing somewhat, with recent data released by Fording Coal of Canada indicating that there may be a bit of spare tonnage about. Fording’s implied stocks of coal increased by almost a million tonnes through 2001, with most of that increase thought to have occurred in the December 2001 quarter.
Australian stocks of export metallurgical coal, however, remained relatively flat at 5.2Mt as at the end of January, up only 2% from 5.1Mt at the end of December 2001. Queensland stocks of metallurgical coal, representing most of the hard coking coal, actually fell from 3Mt to 2.9Mt.
Turning to steam coal, reported Australian export stocks fell sharply from 7.7Mt at the beginning of December to 6.3Mt at the end of December. Relatively sparse data to hand indicates that the fall in reported stocks was accompanied by a rise in spot prices ex-Newcastle to US$28.10/t FOB in February, but the general trend in spot prices elsewhere is downward. Spot prices out of Richards Bay, South Africa were down 1.7% in February to US$28.80/t, with Global Coal’s forward curve indicating a moderate downward trend for the rest of the year.
The maximum successful evaluated price for the latest Taipower tender for standard bituminous coal was down 4% from the previous tender let in November 2001, with all tonnage won by Indonesian and Chinese suppliers.
